Durham neighborhood may sell to Wal-Mart at Southpoint for $20.5M

Sarah McMillian stands in the driveway of a modest ranch-style house in Kentington Heights, a subdivision abutting the sprawling Streets at Southpoint mall. Down the block, a pile of trash gathers in a vacant lot.

"It's not that you want to be like the Joneses, but you don't see that eyesore anywhere else that you would see in a community like this," says McMillian, 29, who grew up in the quiet, working-class neighborhood.

Though it was considered "the boondocks" when most of the houses were built in the 1970s, over the last decade, the suburban neighborhood has gradually become gridlocked in sprawl. Commercial and residential development, including the 1.3-million-square-foot mall that houses a multiplex theater, high-end stores and enormous chain restaurants, as well as adjacent shopping centers, upscale condos and townhouses, now surround the predominantly African-American communityall supported by amenities that have never expanded across the road, such as sidewalks and city water and sewer lines.

Yet despite the roughshod conditions in Kentington Heights, and the fact that two-thirds of the neighborhood's roughly 100 lots remain empty, residents are "sitting on a gold mine," McMillian says.

For a decade, developers have attempted to buy out the 57-acre neighborhood for commercial development. In February, a firm that specializes in developing Wal-Mart stores made the most recent offer$20.5 million, to be divided according to each property's assessed tax values.

In a pattern echoing earlier attempts by various developers to acquire the subdivision, however, the deal is complicated by the need for consensus among the roughly 70 property owners. They include one speculator who has already cashed in on multiple lotsand transferred ownership of others to a church that may or may not exist.

In February, President Scott Smith of WRS Realty in Mount Pleasant, S.C., outlined the proposal at a meeting with about 20 property ownersless than a third of all ownersin the office of local Durham real estate firm Lestep Inc. In an interview, Lestep broker Levell Exum said he's "not aware of anyone who does not want to sell," but acknowledged "It's difficult to get 70 owners to agree."

Since the Southpoint mega-mall was approved 10 years ago, several other commercial developers have failed to persuade a minimum number of willing Kentington Heights sellers, resulting in contract negotiations falling apart. Exum said that WRS has again set a baseline number of buyers. He declined to disclose the number, but said that universal agreement isn't necessary for the deal to work.

The tax-assessed values of Kentington Heights propertiesthe determining factor for how much owners will collectvary widely. For example, one three-bedroom house, which sits on a half-acre lot, is valued at $165,537, while more than a dozen undeveloped lots are valued at less than $3,000 each.

Several undeveloped properties are owned by Durham resident Anita Keith-Foust, who bought 15 lots in 1991 at foreclosure auctions at an average price of $1,000 each. She later sold seven of them at an enormous profit, for $20,000 each.

Keith-Foust, a political activist and one-time talk-radio host, was the main agitator behind a 2002 effort to convince Durham leaders to rezone the neighborhood as commercial property so that residents could sell out at a higher price. Subsequently, the city council designated the property for future commercial use. Keith-Foust then transferred ownership of six of her lots from her name to the name of Maat Temple. The temple is a local congregation of Universal Life Church, which is registered at Keith-Foust's home address and lists her as its pastor.

Keith-Foust says she had planned to build a house of worship and organic garden on the Kentington Heights lots she owns, but then learned that the soil would not support a sewer system, making construction costly and perhaps impossible.

She conducts no services, but instead helps others "on the highways and byways." She defined her ministry as one based on 42 principles centered on peace.

"Right now, it's not really necessary [to have a congregation], because of what we're doing," Keith-Foust says. "We don't need a building. Whoever I come in contact with, who needs help, that's the congregation."

ULC, a California-based ministry, has ordained more than 18 million pastors, according to leader Andre Hensley, and requires only a written request for the designation. Doctorates of divinity degrees are sold for a $20 donation.

Hensley confirmed that Keith-Foust has received her degree and registered her congregation. However, other than paying quarterly dues and subscribing to the ULC newsletter, Keith-Foust's file is empty, Hensley said. She registered as a congregation in 1998 but "never followed through," then attempted to reactivate the congregation in 2004 but hasn't filed any reports since, according to ULC records.

Currently, Keith-Foust's propertiesvalued at a combined $70,000list both Maat and ULC's name on tax records.

Maat is not registered with the state as a nonprofit organization. However, over the past 10 years, Keith-Foust has run at least four other nonprofits out of her house on Trinity Avenue. One, Citizens for Economic and Environmental Justice, is registered as a political action committee in Durham. Another, AKF Enterprises, was dissolved by the N.C. Secretary of State for being delinquent in delivering annual reports.

Keith-Foust asserts that Maat Temple should qualify for an automatic religious exemptionmeaning that she would not have to pay taxes on any income the temple receives.

However, federal records show that over the last four decades, the IRS has revoked ULC's tax-exempt status several times due to possible abuses of its nonprofit designationincluding people deeding their houses to congregations for profit under questionable circumstances.

In support of her claim for tax-exempt status, Keith-Foust lists her activism with her other nonprofits as evidence of her religious activities.

"I went to City Hall every day for years," she said, referring to her work on behalf of CEEJ, the PAC she formed to lobby the Durham City Council for commercial zoning for Kentington Heights.

"You're supposed to have God in everything you do," she explains. "You can't separate that."

Yet, when informed that engaging in political work can hamper a nonprofit's qualification for tax-exempt status, she says, "Those are separate things."

As for the $20.5 million possible sale on the table, Keith-Foust declined to speculate: "Time will tell. I'm not getting my hopes up."